Asset attribution

When we attribute control to you, we count part of the current market value of the trust or company’s assets as yours. The size of this share depends on your level of control.

We don’t count the value of your family home. This is an exempt asset even if a trust or company owns it.

Our assets test doesn’t let you subtract all liabilities. Any liabilities against your home or other exempt assets won’t reduce the asset value of other trust assets.

If you don’t control the trust or company but do get income from it

The income will count in your income test. This includes:

payments the trust distributes to you

dividends the company pays you

imputation credits from the company

These amounts will count in your income test for 12 months.

If you lend money to the trust or company

We’ll count it as a financial asset under the deeming rules. We do this whether or not you control the trust or company.

Relinquishing control

This is where you give up control of a trust or company. If you do this, we consider that you’ve gifted your share of its assets. We may count the value of the gift in your assets test for 5 years. The amount we include depends on:

the market value of the assets you gave up

your level of control

We accept that you’ve really given up control if both you and your partner:

give up all formal roles and control:

with a trust this means you resign as the appointer or trustee and change the trust deed to say so

with a company this means you give up all shares and resign as a director

give up all beneficial interest in the trust by:

changing the trust deed to remove you and your partner as beneficiaries, or

making a separate deed that says you both give up your beneficial interest

declare in writing that you won’t exert any control over the trust or company or benefit from it in any way

Corporate trustee

If your trust has a company as trustee and you want to relinquish control you:

and your partner must give up any shares in that company

must both resign as directors of the company

must declare in writing that you won’t exert any control over the company or benefit from it in any way

Exerting control

Even if you give up formal control of a trust, you may still have some informal control. We need to be sure that you and your partner don’t use any informal control over the trust.

We won’t accept that you’ve given up control if we see signs of informal control. Examples are: